Frequently Asked Questions: When Should I Prepare 1099s?
If you only think about 1099s in January, you are already behind.
Preparing 1099 forms is not a year-end task. It is an ongoing process that starts the moment you begin working with a vendor or contractor. Businesses that wait until the deadline often scramble to collect missing information, correct errors, and rush filings. That is when mistakes happen and penalties follow.
Below is a clear, practical answer to the most common question we hear from business owners.
When should you prepare 1099s?
You should start preparing 1099s as soon as you engage a vendor or independent contractor.
That means:
- Collecting a W-9 before or at the start of the relationship
- Confirming the vendor’s legal name, address, and tax ID
- Setting the vendor up correctly in your accounting system
- Tracking payments consistently throughout the year
Waiting until December or January puts unnecessary pressure on your team and increases the risk of filing errors.
Why early preparation matters
Early 1099 preparation helps you:
- Avoid missing or incorrect taxpayer information
- Reduce rework at year-end
- Lower the risk of IRS penalties
- File on time without last minute stress
According to the IRS, penalties for incorrect or late 1099 filings can range from $60 to $310 per form, depending on how late corrections are made. For businesses with multiple contractors, those costs add up quickly. Read more in our blog on How to Master 1099s for Compliance and Efficiency.
How QuickBooks Online supports 1099 preparation
QuickBooks Online includes a built in 1099 Wizard designed to simplify the process.
When vendors are set up correctly during the year, the tool allows you to:
- Track 1099 eligible payments automatically
- Review vendor details for accuracy
- Generate and file 1099 forms directly from the system
The key is setup and consistency. The 1099 Wizard works best when vendor records and expense categories are reviewed throughout the year, not rushed at the deadline. Read our blog on how to use QuickBooks 1099 Wizard to Master your 1099 Process.
December checklist before filing
Even with good year round habits, December should include a final review.
- Verify vendor information against W-9s
- Confirm payment totals and categories
- Resolve any missing or mismatched data
- Run a 1099 preview report and address issues early
This step helps ensure January filing is straightforward and accurate.
When to get help
If you are unsure whether vendors are set up correctly, payments are tracked properly, or prior year 1099s were filed accurately, it is worth reviewing your process before year-end.
One 8 Solutions helps businesses build clean accounting systems, maintain compliance, and streamline recurring tasks like 1099 preparation. The goal is fewer surprises and more confidence when deadlines approach.
If you want to get ahead of the 1099 season and avoid the January scramble, we can help.
Ready to get ahead of the 1099 season?
If you want fewer surprises at year end, we can review your vendor setup, expense mapping, and 1099 workflow in QuickBooks Online. Schedule a meeting today!
